Caterpillar Inc. ($CAT) Stock Drops on Rising Tariff Forecast

Caterpillar shares fell 3.65% to $419.04 as the company revised its 2025 tariff cost projection upward to $1.5B–$1.8B. The adjustment signals mounting pressure on profit margins, now expected to land at the lower end of guidance.

Market analysts reacted swiftly, trimming price targets amid concerns over Caterpillar's limited ability to pass tariff costs to customers. The industrial giant's $37.5B order backlog remains a bright spot, suggesting underlying business strength despite near-term headwinds.

Trade policy uncertainty under the Trump administration continues to Ripple through industrial sectors, with Caterpillar's $400M–$500M Q3 tariff burden exceeding previous quarter impacts. The pre-announcement triggered a selloff, reflecting investor skepticism about margin preservation.